Sunday, January 31, 2016

InsureBlog turns 11 years old today. I still can't believe my good fortune to have such outstanding co-bloggers, and such loyal and engaging readers. Through the years, we've been the recipient of more than a few accolades (most recently here and here), and we look forward to many more years of serving our readers.

■ Use refundable age-based tax credits to help people pay for health coverage.

■ Increase use of health savings accounts (HSAs).

■ Use a combination of vouchers and block grants to improve Medicare and Medicaid.

This system works much like a school voucher: you pick the plan and company, and use the voucher to help reduce the cost. The advantage over the current method is that you're dealing directly with the carrier, without unnecessary (and often intrusive) government intervention.

While this seems like a commonsense approach to financing coverage, it's not clear how she plans to handle the next objections: underwriting and how (whether?) to cover pre-existing conditions.

From the opening salvos on Single Payer (including a broadside by our own Mike Feehan) to the benefits of wellness ... er ... benefits and Julie Ferguson's epic (and scary!) post on 5 tons of ammonium nitrate within spitting distance of schools and hospitals.

Something for everyone.

Funny true story: My very first turn hosting a 'Review was in May of Aught Six and it was, in fact, the first time I'd ever hosted any "blog carnival." I'd only been blogging about a year-and-a-half at that point, and was a bit reticent about jumping into the fray.

Thursday, January 28, 2016

In a mandatory meeting this morning, agents who represent Blue Cross of North Carolina learned that, as of April 1, they will receive zero compensation on any individual health insurance business. FoIB Jeff M tells me that his health insurance writing colleague immediately contacted the Tar Heel State's Department of Insurance with some questions. The conversation apparently went thusly:

Agent: "Now that Blue Cross will no longer be paying commissions..."

DOI Rep: "Wait, what? When did this happen?"

Agent: "Just learned about it an hour ago, takes effect April 1. So here's my question: may I charge a fee when selling a Blue Cross policy?"

DOI Rep: "We honestly don't know."

Hunh.

I'd have followed up with another question:

"Since these rates have all been pre-filed, and include commissions, will the Department require that either the commission be paid or the rates re-filed to reflect the lower cost?"

We skipped over the first few pages of campaign rhetoric and magic fairy dust to get to the meat of his proposal.

Last year, the average working family paid $4,955 in premiums and $1,318 in deductibles to private health insurance companies. Under this plan, a family of four earning $50,000 would pay just $466 per year to the single-payer program,amounting to a savings of over $5,800 for that family each year.

Health insurance for $466 per year.

Such a deal.

But wait. There's more.

In addition to the $466 annual premium for health insurance, that same family will be required to pay 2.2% of their income.

Around $1,100 per year.

At a little over $1500 per year (taxes + premiums) still sounds like a fair deal.

But wait. There's more.

Bern will also raise taxes considerably on those earning in excess of $250,000 per year. That's about 1.5% of the population, roughly 186,000 households.

Other tax the rich revenues will add up to a projected $238 billion per year in new tax revenues.

Over the last 7 years the Obama administration has managed to add $8 trillion in new debt.

What is Senator Gadfly going to do about erasing the debt he (hopes) to inherit?

"With the 2015 tax season underway, CMS has made the Health Coverage Tax Tool available to help consumers with their tax questions. The tax tool helps consumers claim the affordability exemption and calculate their premium tax credit (PTC)."

Which is nice of them and all, but it's only to be used in certain situations, one of which is if:

"The information on the consumer’s health care tax Form 1095-A about his or her “second lowest cost Silver plan” is missing or incorrect"

The "missing" I get, but how would one have any idea if it's "incorrect?"

I've been working on a really interesting case (well, cases, but one client), and the way it's shaking out offers a rare but wonderful opportunity to illustrate the difference between how different kinds of insurance risks are assessed.

An underwriter's job is to look at an applicant's medical (and often financial) history and compare it to others in similar circumstances to determine how much money the insurance company needs to collect in order to make a profit (or to even issue a policy at all). It's as much art as science, and each type of coverage will involve different criteria.

Here's how that works in real life:

Sally came to me looking for both life and long term care insurance (for a variety of reasons we did not consider a "hybrid" plan that covered both risks). We decided that a $400,000 term policy with a 20 year rate lock-in would do the trick on the life insurance side, and a plan with a total of $180,000 of long term care benefits would fit the other need.

Now notice: the life insurer is going to be at risk for more than twice as much as the long term care insurance carrier. Note also that they both got exactly the same information from Sally's doctor.

(The life insurer did have results from its required blood and urine exam, and the long term carrier had the results of a phone interview to test cognitive ability)

So how'd they do?

Well, the life insurance company approved coverage, albeit at a slightly higher premium due to Sally's physique. But the long term care insurer flat-out declined her.

Interesting, no?

Now, I usually tell people that life and long term care underwriters look at very different criteria because, generally speaking, only one of these plans has the potential for multiple claims. And here's proof of that distinction.

The good news is that there's an appeals process available; Sally also agreed with me that she needs to find out exactly what's in the doctor's records that caused the problem. This isn't a a bad idea - after all, Magic Johnson only found out about his AIDS because he had applied, and been declined for, additional life insurance.

The bottom line is that it's nice to have independent, real-world validation of a basic insurance process. Hard to beat that.

That was the headcount in December, with the goal of hitting 21 million victims enrollees. I asked at the time "who really thinks they're going to make up that 15 million person deficit in the next two months?"

"[T]he ACA’s Medicaid expansion is costing far more than projected because of higher enrollment and higher spending per enrollee."

So let me get this straight: fewer healthy, paying customers are signing up for ObamaPlans, and more expensive freeloaders non-payers are signing up for Medicaid, and the leaders of states who took a pass on Medicaid Expansion are the morons?

Hunh.

Oh, and this just in from CMS:

"Plan Year 2016 Open Enrollment closes on January 31"

Any bets on 8 million new paying customers signing up in the next 6 days?

Please bear with me here as I attempt to connect some very interesting - if disturbing - dots.

As regular readers know, AHIP (the health insurance industry's lobbying organization) has been on-board Team O'Care since Day One. What folks may not know is just how deep the ties run between the administration, major labor unions and the insurance industry.For the purposes of this exercise, I think it best if we start at the end and work backwards:

[Click pic to embiggen]

That's a screen cap from a rather enlightening document from the Clinton Library detailing some of the behind-the-scenes HillaryCare "negotiations." And here's where it gets interesting:At the time this was going on, Karen Ignani was the director of the AFL-CIO's Department of Employee Benefits, and then immediately segued into running the American Association of Health Plans (which eventually became AHIP, America’s Health Insurance Plans). So, running the benefits advocacy arm of arguably the largest labor union, then straight to running the lobbying arm of the health insurance industry.And where is the lovely Ms Ignani currently? Well, she's safely ensconced as President and CEO of EmblemHealth, a New York-based insurer with almost 3 1/2 million members (and $10 billion in the bank). Which brings us back to the rather interesting (embarrassing?) revelation from that 1993 meeting. And remember, at the time she was either already heading up the health insurance industry's trade group or about to:"Karen Ignani was concerned or upset about leaving insurance companies in charge of the health plans ... who preferred to see a single-payer system" [emphasis added]Interesting conflict of interest there, wouldn't you agree?Let's move on, shall we? After all, I promised dots (as in 'plural'):So we have one woman who went from the AFL-CIO to AHIP to EmblemHealth.But who replaced her ?Well, that would be the lovely and talented Marilyn Tavenner, who came to AHIP directly from her previous gig as Administrator of the Centers for Medicare and Medicaid Services, which is part of the bureaucracy tasked with implementing ObamaCare.So, government bureauweenie to lobbyist for the very industry she was previously responsible for policing.Are we beginning to see a pattern here?Which brings us back to why, exactly, would a paid industry shill - as well as the current CEO of a successful health insurance company - be "concerned or upset about leaving insurance companies in charge of the health plans?" The fact that the end-goal of both HillaryCare and ObamaCare is Single Payer seems relevant, no?Which still leaves me puzzled, and a bit disturbed.Or am I missing something obvious?

Monday, January 25, 2016

We've written extensively about CO-OPs (most recently here); I've actually been a fan of the model all along. The major problem is that in practice, that model doesn't appear to be self-sustaining, as more than half of them are already kaput, and most of the rest are in major financial straits.

Friday, January 22, 2016

Trying to find a United Healthcare Obamacare plan? Good luck. They are out there, but you might have to look to find them.

UnitedHealthcare apparently took steps to ensure that it did not sell too many health plans on the federal marketplace during the current open enrollment period for the Affordable Care Act.

the health insurer reduced the commissions it paid brokers for plans sold on the federal marketplace to 2% from 6% and later said it would no longer pay commissions on the plans.

It also required brokers to call the company to obtain price quotes that previously had been available online.

"They would get back to me in the next couple of weeks — maybe," McArdle said. - JS Online

Making matters worse, Obamacare rules require agents to show ALL available plans to prospective clients ......... even if they are paid $0 should a sale result. Failure to comply carries stiff penalties.

So it's surprising that Republican presidential hopeful Ted Cruz would make the obviously and demonstrably false claim that he and his family had lost their Blue Cross health insurance because the carrier cancelled all of its individual policies.

He further compounded this lie with the equally silly claim that a new plan would have premiums 50% higher than the cancelled one.

Recently, I received email from a carrier touting its newest Indexed Universal Life product, hailing it as "Using Life Insurance for Your Client’s Smart Money."

Basically, the company recommended using its quasi-investment-based life insurance policy as a single-premium "one-and-done" policy; that is, no more premiums would (probably) ever be due. The idea is that the policy's cash value would grow quickly based on the stock market. There are a lot of problems with this strategy, but the primary one is that, as Mr Maurer notes, there are plenty of other, more effective investment vehicles available.

Tuesday, January 19, 2016

As we've previously noted, United Healthcare is the 800# gorilla in the Federal Marketplace ("Exchange") room. While this may, in fact, be an enviable position, it's not without risk. Namely, "the bigger they are..."

Of course, this was completely unexpected, nor was there any way for prescient carrier prognosticators to anticipate...

Wait, what?

"The health insurer ... said the poor experience in the ACA exchanges was due to sicker-than-average consumers enrolling in its health plans and a surplus of people signing up outside of the open-enrollment window."

Monday, January 18, 2016

One of the reasons Bernie Sanders’ sun is rising - and Hillary Clinton’s is setting – is their difference over government-paid generic medical insurance. (Which, of course, they still call “healthcare”).

Bernie favors a single-payer arrangement he calls Medicare for All. This is popular among the self-described progressives in the Democrat Party, and among the American left. It’s popular because its leading advocates – e.g., Bernie – promise it will give everyone better coverage, will cost less, and will be easy to use. What’s not to like?

There’s an interesting back story here. At least two states have already tried to design workable single-payer plans for their residents. Both gave up because of high cost. One of them is Connecticut, the other is Bernie’s own Vermont.

And in 2014, Vermont shut down its state single-payer project. With Bernie’s help, Vermont had received $45 million federal funding to design such a program for the Green Mountain People’s Republic. Vermont hired Top Men for the design group, including the notorious Jonathan Gruber from MIT. But Vermont shut down its project because it would have cost almost as much as the entire state budget. Vermont supporters of single-payer didn’t like that because, they claimed, savings would far outweigh the costs. Ever hear that before?

This backstory is not exactly secret, but hasn’t been much reported, either. During 2016, the candidates’ differences over government-paid generic medical insurance will likely become much more prominent. Superficially Medicare for All does look better than Obamacare, I think mainly because Obamacare is so dysfunctional. Let’s not forget Obamacare was deceptively sold to America by the progressive/left wing of the Democrat party; the Democrat-majority Congress passed Obamacare without a single Republican yea in either the House or Senate; and then we found that all along, the progressive/leftists consider Americans “stupid”.

My opinion? None of the promises progressive/leftists make about Medicare for All – more coverage, for less cost, and simpler administration - survive thoughtful analysis from experts other than the partisan progressive/leftists themselves. Technically, there are huge flaws that cannot be ignored. Politically, fancy promises about how great it’s gonna be, have been made before by the same people, and spectacularly failed to materialize. Exhibit A: Obamacare. Fool me once . . . etc.

Wednesday, January 13, 2016

So, one of my small group clients just lost the last person on his group plan. It had gotten so expensive that no one could really afford to stay on it. Shopping around didn't help: everything we looked at was at least as expensive for comparable benefits. And the plan was pretty much bare-bones, not a lot of fat to trim.

He'd like to be able to continue offering some kind of coverage, but now that the plan has no active members, there's not much we can do. One alternative is to offer to help pay for individual plans (there are still legit ways to do this), but that's really only an option during Open Enrollment, which means that, for most of the year, no can do.

Tom has been a client - and friend - for almost 30 years. A small business owner, he was proud to be able to offer his employees coverage. Now that's gone.

As we noted in December, all the panty-twisters' protestations are, in fact, meritless, since the program itself was simply an exercise in phone-and-penmanship by former Governor Bashear. And there's this: "most Kentuckians are paying for the service through the 1 percent surcharge for a service that only a fraction of Kentuckians use." I thought O'Care supporters were all in for "fairness."

This is the oft-overlooked truth about nationalized health care schemes: the providers become employees of the state ("who pays the piper calls the tune"), and are thus subject to said government's whims. In this case, some 4,000 elective procedures, including hip and knee replacements, were put off; one wonders how many patients' symptoms are now even worse.

In an attempt to make Obamacare look like a success, the regime continues to manipulate the rules with impunity as a way of making this turd look attractive.

The administration has created more than 30 “special enrollment” categories and sent emails to millions of Americans last year urging them to see if they might be able to sign up after the annual open enrollment deadline. But, insurers and state officials said, the federal government did little to verify whether late arrivals were eligible. - NYT

What's wrong with that, you may say? Wasn't Obamacare supposed to insure a larger number of people?

“Individuals enrolled through special enrollment periods are utilizing up to 55 percent more services than their open enrollment counterparts” who sign up in the regular period, the Blue Cross and Blue Shield Association, whose local member companies operate in every state, told the administration.

Three very serious problems, and it's not really clear how much they overlap (ie how many were overcharged vs how many couldn't confirm vs how many put in wrong plans). The good news is that the BX folks are working to resolve these issues.

Additional serious losses in NY in 2016 increases the likelihood that United will pull out of the State Exchange for 2017. Of course United's participation in all other Exchanges for 2017 is in doubt and the doubt just got bigger. United’s CEO Stephen Hemsley now says that participating in the Obamacare individual Insurance Exchanges “was for us a bad decision”

Most NY insurers, not just United, say that the New York State rate-review process failed. The New York State Insurance Department disagrees.

UnitedHealth requested a 22 percent rate increase for individual Obamacare plans. Instead, state regulators allowed the company to boost rates by 1.65 percent. The company also sells business under the Oxford brand, which requested a 5.32 percent rate increase,and was forced instead to cut rates by 12.25 percent.

But Health Republic was able to lock in rates much lower than its competitors, NY's Depatment of Financial Services health insurance honcho Troy Oechsner claims that “we did the right thing at the time, given the uncertainty of the market.”

If it turns out political maneuvering is even a little bit true, my guess is that there are political influence peddlers from Washington to New York (and insurance dept officials in New York, too) who should lawyer up and start worrying about significant prison time.

Note: there are two other co-ops sharing the "HealthRepublic name" - in New Jersey and Oregon - but they're not affiliated with New York's version and aren't affected in this particular instance.

However: all three were set up by the Brooklyn-based Freelancers Union, about which we've written extensively - if not favorably - in the past.

Friday, January 08, 2016

That is, the whole flimsy house of cards upon which the ObamaTax was built relies substantially on enticing young (and presumably healthy) victims people to enroll. That's because, by and large, this cohort tends to have fewer (and less expensive) claims, so they represent essentially free money to "the system."

But what happens when you can't enticethreaten cajole them into actually pulling the 404Care.gov trigger?

Well, you have lots of unhealthy folks (of all ages) signing up, causing major claims, which are then supposed to be backstopped by Uncle Sugar (how's thatworking out?).

In a nutshell: that which can't go on, won't . That is, as more and more younger (generally healthier) young people continue to opt out, claims will continue to rise with little or no corresponding increase in premium revenue.

CMS (Center for Medicare Services) is responsible for Obamacare oversight.

This includes everything from reviewing carrier health insurance plans and compliance to managing the (still dysfunctional) healthcare.gov website.

Now we hear the HHS OIG (Health and Human Services Office of Inspector General) notes that for the EIGHTH TIME in less than a year they found that CMS is incapable of accounting for the distribution of taxpayer subsidy funds.

CMS relied entirely on data from health insurers to verify whether enrollees had paid their premiums and were eligible. Unfortunately, this data was insufficient - insurers provided payment information on an aggregate rather than enrollee-by-enrollee basis, making verification all but impossible.

"CMS had not yet established computer systems to enable marketplaces to share confirmed enrollment data; therefore, CMS did not verify that QHP issuers were returning APTC overpayments to Treasury." - ATR

Wednesday, January 06, 2016

The #ObamacareFail project is not only creating problems for consumers (who can't find

AFFORDABLE health insurance) and agents (who can't make a living selling this crap) but now has invoked the wrath of policyholders.

Allow me to introduce you to #onholdwith, a consumer-centric site where policyholders can express their frustration with health insurance hold times and cheesy elevator music ......... sometimes in Spanish.

Tuesday, January 05, 2016

According to the folks at the Kaiser Family Foundation, folks who had employer sponsored health plans (ESI) fared even worse than those who were uninsured.

And as an aside, 5+ years in, and there are still uninsured? Thought that was the whole point of the ObamaTax. Hunh.

And also note that it doesn't seem to matter what type of plan design either (high vs low deductible). Of course, the deductible is only part of the story: the total out-of-pocket will also include co-insurance and premiums.

We already know that the first wave of the most recent Open Enrollment season was an unmitigated disaster, with far fewer victims enrollees than either predicted nor necessary for sustainability. This of course has a major dampening effect on insurers, who need the influx of the mostly healthy folks that wisely opt out to help offset huge claims losses.

Friday, January 01, 2016

Obamacare was created in backroom deals with legislators that have long since retired or died. Hailed as bi-partisan even though it became law without a single Republican vote.

Five years later we have carriers that have bailed on Obamacare, some hit the eject button before the new rules hit the market. Over half of the health insurance co-ops created by the DC bottomless money pit are either on life support or have already pulled the plug.

Predictably, when free money is readily available, pigs will gather at the trough to get their share.

Cigna Inc., the insurance giant that backed out of the Florida’s federal insurance marketplace in October because of an “exponential increase” in fraudulent drug testing claims in treating addicts has uncovered another type of fraud — lying about Florida residency to get insurance.

“For example, one broker was found to have enrolled nearly 100 customers — none of whom appear to have had any prior connection to Florida — at an apartment that was connected to a relative of the broker,” wrote Cigna spokesman Joseph Mondy in an email response to questions posed by The Palm Beach Post. “In other instances, customers enrolled using the address of a substance-abuse treatment facility as their claimed residence. - Palm Beach Post